Staples and Target released their latest earnings reports before opening bell this morning. Staples posted adjusted earnings of 17 cents per share on $5.1 billion in sales, against the consensus estimates of 16 cents and $5.09 billion.
Target posted adjusted earnings of $1.29 per share on $16.2 billion in revenue, compared to the consensus estimates of $1.19 per share on $16.31 billion in revenue.
Staples’ profit falls
Staples’ GAAP profit declined from 9 cents per share or $59 million last year to 6 cents per share or $41 million in this year’s first quarter. The GAAP results include charges of $66 million, most of which were related to expenses from the failed merger with Office Depot and planned store closures. They also include a $32 million charge related to the pending Print Solutions segment sale. Comparable store sales declined 3%, excluding foreign exchange, or 4% including impacts from foreign exchange.
Staples management expects second quarter adjusted earnings of 11 cents to 13 cents per share, which is right in line with consensus at 12 cents per share. This guidance excludes expenses connected to the failed merger with Office Depot and with the termination of that agreement, plus impacts from continuing store closures. Management expects to close at least 50 North America locations this year.
Shares of Staples increased 2.66% to $8.50 in premarket trading this morning.
Target releases weak guidance
Target’s GAAP earnings increased from 98 cents per share last year to $1.05 per share this year. The big box retailer’s same store sales fell short of expectations, rising 1.2% against the consensus of a 1.6% increase. Comparable digital channel sales grew 23% after last year’s first quarter increase of 38%.
Target expects second quarter adjusted earnings of $1 to $1.20 per share, which is far short of the consensus at $1.36 per share. The retail chain expects same store sales to be flat to down 2% for the quarter, against the consensus of a 1.8% increase.
Target shares plunged 7.39% to $68.15 in premarket trading this morning.
